Navy Secretary Ray Mabus has fired the top two administrators of the Naval Postgraduate School in Monterey, Calif., for mismanagement and fostering an atmosphere of defying Navy rules and regulations.

The firings of the school's president and provost come after an investigation by the Navy's inspector general. It found that the president, Daniel Oliver, failed to comply with federal and naval regulations, circumvented federal hiring authorities and inappropriately accepted gifts from a private foundation that supports the school.

The investigation also found that the provost, Leonard Ferrari, did not comply with Navy regulations and accepted gifts from the foundation.

According to the IG report, Oliver arranged for an unidentified woman to be hired as a contractor so that she could be paid more money than the school could legitimately offer. The report said Oliver circumvented federal salary limits after the applicant turned down the school's initial salary offer of $162,000, with a recruitment bonus of $25,000, according to the IG report. The offer was the maximum allowed under federal salary caps at that time, in 2009.

The report said Oliver arranged for an existing school contractor - Digital Consulting Services - to hire the woman, for a salary of $275,000, which she accepted.

The report also said that Oliver solicited and accepted gifts from the foundation, including a gas grill and patio furniture for his home on the campus, in violation of Navy procedures. The IG also concluded that both Oliver and Ferrari authorized the foundation to repay themselves, faculty members and staff for expenses - such as luncheons, dinners, small gifts, or wine for a reception - that they knew they could not otherwise use school funding to buy.

Oliver, a retired vice admiral and naval aviator, has held the job since April 2007, and Ferrari has been in place since July 2006.

Mabus appointed Rear Adm. Jan Tighe to serve as interim school president, and O. Douglas Moses, the current vice provost of academic affairs, will serves as the acting provost.

Mabus also has created a working group that will implement the recommendations in the IG report.

"The overarching problem, as our report demonstrates, is that NPS chooses not to follow governing Navy rules, regulations and laws in the conduct of the majority of its programs, because it will not reconcile its academic philosophies and ideals with the governing standards," the report wrote. "We observed that NPS systematically and regularly excludes subject matter experts from its decision making process and refuses to consider advice that conflicts with desired courses of action."

The U.S. Navy released the following statement Tuesday night:

"Navy Secretary Ray Mabus relieved Nov. 27, the two top leaders of the Naval Postgraduate School (NPS) after a Navy investigation revealed evidence of mismanagement and failure to comply with federal statutes and Department of the Navy regulations.

Retired Navy Vice Adm. Dan Oliver will step down immediately as the school's president. Also to be replaced is the school's provost, Dr. Leonard A. Ferrari.

Navy inspection and investigations into management practices at the prestigious school determined that the school's leadership fostered an "atmosphere of defiance of statutory requirements and Department of the Navy rules and regulations."

The investigation found that Oliver misused standard contracting procedures to circumvent federal hiring and compensation authorities. The investigation also found that Oliver and Ferrari inappropriately accepted gifts from an independent private foundation organized to support the school. The inspection determined that school leadership consistently failed to solicit and consider the advice of the school's technical experts, including its attorneys.

The inspection found a solid institutional commitment to academic integrity at NPS and a strong academic curriculum.

Mabus directed the formation of a working group to be led by Assistant Secretary of the Navy for Manpower and Reserve Affairs Mr. Juan M. Garcia. The working group will report directly to Under Secretary of the Navy, Mr. Robert O. Work, and the Vice Chief of Naval Operations, Adm. Mark Ferguson. The group will be charged with directly and indirectly implementing the recommendations of the inspection and investigation reports.

The Naval Postgraduate School is located in Monterey, Calif. Oliver has been serving as the school's president since April 2007. Ferrari had been provost since July 2006.

Mabus appointed Rear Adm. Jan Tighe as interim NPS President until a permanent president is appointed. Her most recent assignment was on the staff of the Chief of Naval Operations as the Director, Decision Superiority. Tighe was awarded a doctorate in Electrical Engineering and a Master of Science in Applied Mathematics from NPS in 2001. Dr. O. Douglas Moses, who is currently Vice Provost of Academic Affairs, will serve as Acting Provost during the transition."